This is huge and well worth reading… titled “The Destruction of Economic Fact”, this article is about how financial rules have been changed to circumnavigate the truth in order to gain short term profit. The end result is not just uncertainty, but an erosion of stability that previously attracted so much worldwide investment into the US economy.

Money quote:

…businesses are left to figure out reality on the basis of connections, influence, and private information. Just like we do in developing and former communist countries.

Good stuff shedding light on liberal advocates pushing lenders to make bad loans, then decrying efforts by those banks to turn bad money into good, and all while proudly twisting the truth in an Oscar winning movie.

Yup – sounds like a liberal.

The meltdown was not caused by the bankers who mislabeled their risky debt; the economy would have collapsed no matter who was holding the bag when it all went sour. The only crime committed by the villains depicted in Inside Job was to make sure they weren’t personally liable when all those bad investments went kablooey.

And I like this description of big business… because this is what a large company that’s trying to attract investors is SUPPOSED to be like:

It’s clever to stir up populist outrage against the fatcats who tried to enrich themselves when everyone else went broke. Who doesn’t hate devious fatcats? Even I hate them. But in this case I know that they didn’t cause the recession: they merely tried to profit from it. Because that’s what fatcats do: They try to profit from anything, in any financial climate. That’s what makes them fatcats.

And finally the bit about fooling a TV audience that’s more interested in entertainment than politics… but maybe took the bait as well:

But most Americans will never know any of this. Inside Job dominates the headlines, and the thesis it puts forth is the accepted wisdom of an angry nation. Only the few of you reading this essay, plus a handful of researchers and analysts, are aware that there’s a different side to the story. I concede my likely defeat in this particular battle from the War of Ideas. But all I can do is call it like I see it, a tiny voice in a hurricane of disinformation blowing in the other direction.

Besides the obvious point Stossel makes about destroying perfectly good assets, I was thinking of other “elephants in the livingroom” aspect of this government program.

First, smart people who buy cars NEVER buy them new – they immediately lose value once driven off the lot. The best way to buy a car is get a used vehicle for much less money with several years of use remaining.

Second, most people take out loans to buy cars – that supposedly was why car dealers were hurting when credit dried up last year. But a big part of our economic trouble is that too many people borrowed too much… so why not start up a government program to encourage more borrowing… pretty wacky stuff.

In essence the government continues to encourage people to make bad economic decisions… sound similar to the way Fannie and Freddie were instructed to make loans to people that couldn’t afford them?

Ed Morrissey of HotAir.com makes some valid arguments against government intervening with private markets:

Why did GM and Chrysler, both owned in part by the same government that launched C4C, do so poorly? In part, they didn’t have cars to sell. Both GM and Chrysler had curtailed their production during their bankruptcies but had worked to have inventory ready for the new sales year. By launching C4C in the middle of the summer, when most dealers are already cutting prices to move inventory off the lot, the administration practically guaranteed that C4C would leave them on the sidelines.

Something else seems to have escaped these two U. S. senators – namely, that they are U.S. senators. Which means their getting a loan at a preferential rate through the head of a corporation like Countrywide, which was very much dependent on favorable treatment by the government before it came crashing down at great expense to the taxpayers, is quite different from a private citizen’s getting a mortgage at the same preferential rate.

Why? Because the private citizen is in no position to return the favor through political influence. Which is why the ethical standards expected of public officials are higher. Or at least should be. That crucial distinction used to be well understood. I’m not so sure it is now.

This is essentially about the senate ethics committee pretending it doesn’t see corruption. Sen. Dodd and Sen. Conrad got off because their cohorts decided the rules they bent were bent by others also… never mind they received gifts from those they were supposed to be regulating. Bastard politicians.

And let’s be clear – it’s not like a parking violation or speeding during rush hour. People are losing their homes due to a mortgage industry that was wildly out of control… but Dodd and Conrad get off because, well – because everyone else was doing it too.

The ethics committee’s decision was an indictment of the rules, not an exoneration of Dodd and Conrad.

Again, my only surprise is that elected officials are surprised when angry constituents show up at town hall meetings frothing at the mouth.